Electric cars are cheaper to own and run, according to new study

December 11, 2017

Pure 100% electric cars cost less to run over four years then petrol or diesel cars in the UK, US and Japan – but China is well set to lead the market.

electric car

New research has shown that electric cars are already cheaper than petrol or diesel cars, with the lower cost a key factor in the current rise in electric car sales.

The lower cost of electric cars is partly because of government support, but electric cars are now expected to become the cheapest option without government subsidies in the next few years.

The research, carried out at the University of Leeds, analysed the total cost of car ownership over four years, including the purchase price and depreciation of value, fuel costs, insurance premiums, road tax and maintenance expenses. They examined four different markets: UK, Japan, Texas and California and were surprised to see that electric cars worked out cheaper in each one.

Full electric cars have lower fuel costs as electricity is cheaper than petrol and diesel. They also have less maintenance costs as electric engines are simpler and help to brake the car, which saves on brake pad wear and tear. The annual cost of an electric car in the UK was about 10% less than petrol or diesel cars in 2015.

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Although full or ‘pure’ electric cars work out cheaper, hybrid cars are slightly more expensive to run than petrol or diesel cars as these attract lower subsidies. Plug-in hybrids are a lot more expensive except in Japan, where they receive higher government subsidies.

James Tate, who carried out the research with Kate Palmer and colleagues at the University of Leeds, said:

“We were surprised and encouraged because, as we scale up production, [pure] electric vehicles are going to be becoming cheaper and we expect battery costs are going to fall.”

In the UK pure electric cars currently receive a sales subsidy of around £5,000, and £6,500 in the US and Japan. Regarding the subsidies, Tate said: “The subsidies are reasonably expensive at the moment but they are expected to tail off.”

With no subsidies in place, Tate estimates that a pure electric car such as the Nissan Leaf will be as cheap to own as a petrol car by 2025 – which is in line with Renault’s prediction that this will happen by the early 2020s.

The recent focus on the production of electric cars has been driven by global concerns over air pollution – particularly from diesel cars. Sales of diesel cars have fallen by 30% in the UK in the last year, while sales of electric cars have increased by 37%.

At the current rate sales of electric cars could move ahead of diesel cars as early as 2019, according to analysis by the Energy and Climate Intelligence Unit.

However, the biggest potential stumbling block is the lack of good electric cars in the middle range where family cars are usually found. At the low cost end there are good options such as the Nissan Leaf, and the high end is well served by the like of the Tesla Model S, but the ‘fat middle’ where most car purchases take place is currently lacking a top quality pure electric car.

In response to the research results the director of the RAC Foundation, Steve Gooding, took a more realistic approach as the UK electric car market still remains quite small:

“There are 32m cars in the UK – only around 120,000 are ultra-clean [electric]. The petrol and diesel juggernaut will take some halting.

“And cost [of ownership] isn’t everything. Practicality and usability are key. We need a public charging network that is extensive, reliable and offers recharging at the speeds car owners require.”

Last month the UK government announced £200m worth of funding for the charging infrastructure, with transport minister Jesse Norman saying:

“The UK now has over 11,500 publicly accessible charge points, including over 900 rapid charge points. This is one of the largest rapid networks in Europe.”

Top selling pure electric cars in the UK

Nissan Leaf – 22,250 sold

The four-door Leaf starts at £21,500 – after the government’s £4,500 subsidy – and has a real-world range of about 100 miles

BMW i3 – 8,800 sold

The zippier i3 starts at £28,840, with a range of 125 miles, or over 200 miles with an additional range extender

Tesla Model S – 6,283 sold

This starts at £65,000, and does 0-60 mph in 4.2 seconds, with a real-world range of about 250 miles

Renault Zoe – 6,227 sold

The Zoe starts at £14,250, but there’s compulsory battery hire of £49 a month on top. The range is about 70 miles in cold weather, 100 in warm

Nissan e-NV200 – 2,742 sold

This van starts at just over £20,000, including subsidy and VAT, and the range is about 70 miles

Data source: Cumulative sales to October 2017, EV-volumes. com

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